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Frost & Sullivan Finds Growth in Kenyan Call Center Market

November 13, 2008

As the U.S. call center industry continues to struggle amidst daily announcements of closing and job loss, the global market is experiencing a somewhat different picture. Strong growth is happening in a number of regions as companies continue to make changes to reduce costs in a down market.

According to new analysis from Frost & Sullivan, growth in the Kenyan call center market is projected to reach triple digits over the next few years. The market’s expansion will be accelerated by development initiatives in the market and Kenya’s cost competitiveness in relation to other markets in the continent.

Frost & Sullivan (News - Alert) analysis of the Kenyan call center market, finds that the market earned revenues of US $6 million in 2007 and estimates this to more than triple by 2014 to reach US $19.3 million.

"Kenya is fast becoming a significant tier II call centre market, to be regarded in the same light as established markets such as South Africa," noted Frost & Sullivan Research Analyst Spiwe Chireka, in a Thursday statement.

"The increasing number of tier I outsourcers redirecting their operations to the Kenyan market, coupled with strong government and private sector initiatives, have set the market on a path of significant growth from 2009 onwards."

Call center operating costs are set to reduce significantly due to telecommunications infrastructure development projects within Kenya. The country has also engaged in an aggressive marketing campaign to promote offshore call center services and has developed world-class customer care standards for the sector.

"Kenya has the three major requirements for successful call center market implementation," added Chireka. "All that is left is for the sector to begin reaping the rewards of its efforts."

Bandwidth costs remain high, which is a challenge within the industry, hindering the operation of call centers. Kenyan also relies on satellite technology for international connectivity and this has significantly affected the quality of call center services.
 
Kenya also has a general lack of call center culture, as customers tend to prefer face-to-face service. This aspect has limited the growth of the domestic market, with companies unable to justify the setting up of contact centers due to the limited uptake of the services.

"Kenyans are not yet adopting call centre services to levels required for strong market growth," cautioned Chireka. "Some financial institutions are getting by with less than ten seats."

For the most part, call center expansions have been hampered by the excessively high bandwidth costs as operators are forced to limit their call volumes. Most call centers are operating IP-based systems, further aggravating the situation.

Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan's articles, please visit her columnist page.

Edited by
Jessica Kostek

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